Banks have been wooing depositors since the global financial crisis made the wholesale market an expensive place to source funds. So savers have been spared some of the pain since the Reserve Bank started cutting interest rates late last year.

There's been no change in the interest rate on 20 per cent of savings accounts since the central bank started cutting last November, and about 55 per cent have had their rates shaved less than the RBA's moves, according to RateCity.

The remainder matched the moves in the main, though a few accounts suffered the indignity of deeper rate cuts. In some cases, the picture was distorted by a promotional or bonus rate being propped up while the base rate behind it was quietly cut.

Still, as popular as deposits are, low interest rates are starting to pose a challenge for savers, especially retirees, advisers say. That means people need to save effectively, securing the best terms for their deposits and ensuring they don't hand some of that back in unnecessary account-keeping fees.

Let's look at the options and some product recommendations from RateCity.

TRANSACTION ACCOUNTS

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For many people, this is the only "savings" account they have. But financial products researcher Canstar found in a study earlier this year 29 per cent of transaction accounts didn't pay interest on balances below $1000. Even at $5000 some 15 per cent of accounts still didn't pay interest.

Of those accounts that did pay interest, half paid less than 2 per cent.

Fees can be another killer on transaction accounts. A monthly account-keeping fee of $5 is equivalent to 3 per cent a year on a $2000 balance, Canstar says.

The new "tick and flick" rules, making switching easier, mean it's a good time to shop around. Teachers Mutual Bank chief executive Steve James says TMB has signed up about 600 people a month so far this year - significantly up on last year - suggesting people are looking for a better deal and better service.

Michelle Hutchison of RateCity says you should consider how you use your transaction account - do you use Eftpos rather than withdraw money from an ATM and how frequently do you access the account? - then find an account with terms and conditions that suit your habits.

RateCity likes the Bankwest Zero Transaction Account, which has no monthly account fee when you deposit $2000 a month and provides free access to all Bankwest-, CBA-, Westpac-, NAB- and ANZ-branded ATMs. With Bankwest's Hero Transaction Account you have free access only to Bankwest ATMs but you're paid 4 per cent a year on balances up to $5000 (though 0 per cent after that).

SAVINGS ACCOUNTS

Financial planners Anne Graham and Andrew Hewison both suggest that as well as having a transaction account for day-to-day living, you regularly - and automatically - transfer money into a separate savings account.

Savings should be treated as a non-discretionary item, just like the water bill, says Hewison, an adviser with Hewison Private Wealth.

The savings account can be for emergency funds - ideally a year's living expenses, two years if you're retired - and for short-term savings goals such as an annual holiday.

Hewison suggests a third "expenses" account where you set aside money for non-discretionary items such as utility bills. This account shouldn't have ATM access so you're not tempted to dip into the money, he says.

Savings accounts are broadly divided into "plain vanilla" accounts versus accounts that offer promotional or bonus interest rates, and traditional bank accounts versus online accounts. But the distinction in terms of interest rates has been blurring as institutions fight for depositors.

Hutchison of RateCity says care needs to be taken with promotional rates and bonus savers to meet the terms and conditions that apply.

You might need to deposit a certain amount each month and/or make no withdrawals to avoid falling back on to a low base rate. A promo rate will have a time limit, at which point you'll transfer on to the lower rate.

She notes that after the recent rate cuts, some banks maintained their high "headline" bonus or promo rates but cut the underlying base rate. "Look for an account where the base rate is high," she says.

A vanilla savings account with a solid ongoing rate might be better than a supposedly high-interest account where you fall on to a low base rate.

And don't just assume that online automatically means high interest.

"They usually do have high interest rates but there are a lot that don't," Hutchison says. At the time of writing, online savings accounts ranged from 5.75 per cent down to 3.9 per cent.

The top online savings account on RateCity's database (as of June 25) is the no-fee RAMS Saver account, paying 5.75 per cent if you deposit $200 a month and make no withdrawals, or 4.95 per cent otherwise.

The Citibank Online Saver follows on 5.70 per cent and ING's Savings Maximiser at 5.6 per cent.

The top bonus savings account is from Easy Street. It offers 5.61 per cent if you deposit $50 a month and make no withdrawals but that slumps to 0.01 per cent otherwise.

Among the five major banks the top bonus account is Westpac's Reward Saver, where you can earn 5.30 per cent under the same conditions but 0.5 per cent otherwise.

Bonuses aside, the top base savings rate is 3.5 per cent across all of the Big Four banks.

TERM DEPOSITS

If you have a dollop of money to set aside, rather than have a monthly savings plan in mind, a term deposit might be the way to go.

However, Hutchison says term-deposit rates have dropped in line with the cuts to savings accounts since November, so the rates on offer now are on average 0.5 percentage points lower than late last year.

With term deposits, make sure you don't roll over on to a low rate at maturity and favour a term deposit that pays interest periodically rather than just on maturity if you're taking a longer term. Not all deals are advertised.

"Be open, if you can, to different terms," Hutchison says. "Ring and ask what 'specials' they have - they might have a better rate for a month shorter or a month longer than you were thinking."

Graham, principal of McPhail HLG Financial Planning, and Hewison say term deposits are popular with clients because of the government guarantee on deposits.

"However - big, big exclamation mark - with falling interest rates, while fixed interest is still very safe … we are now hitting a dangerous level where term deposits are not providing retirees with the returns needed to survive," Hewison says.

"TDs will never grow in value," he says. "However, the cost of living will increase." That means term deposits should be part of a diversified fixed-interest strategy, which in turn is part of a diversified investment portfolio.

MORTGAGE OFFSET

Lastly, don't forget the mortgage as a place to save if your home loan comes with a redraw facility or offset account (see story on page 3).

"My recommendation is 9.5 times out of 10 to pay down the mortgage at all costs," Hewison says.

As well as reducing your debt, it's a tax-effective place to park any spare cash because you're not actually earning interest, on which tax would be paid. You are just reducing your interest liability.

Let's say you have a $3000 tax refund that you want to put away for a year or two, for a holiday.

Hewison says that if you put that into a savings account at a rate of 5.75 per cent you'd earn interest of $172.50. But after paying tax at 37 per cent you'd be left with $108.

Place the $3000 on your home loan instead and, in effect, you'd be "earning" your mortgage rate of, say, 6.5 per cent - a tax-free $195.

Home deposit closer

It was an expensive year for Lesley Guerin-Goodall: she got married, took extended time off work after the death of a family member, and set up her own small business.

The epiphany came while on holiday in Bali over Christmas. Guerin-Goodall felt she and her husband were spending too much, and he was bearing a lot of the burden while she established her business.

''We were newly married, we want to buy a house, we want to have kids in the next five years - I really thought, 'It's time to pull back','' she says.

The result was a self-imposed ''buy ban'' as of January - she would spend only on necessities and on her business.

''We even sold our car,'' she says. ''It wasn't really a necessity. We were paying out a loan and we were using public transport all the time.''

A few thousand dollars have found their way into the online bank account she set up - ''out of sight, out of mind'' - and eventually the money will go towards the deposit for a house.

Guerin-Goodall will ease up on her buy ban once she hits her savings target but doesn't think she'll go back to her old ways. ''[We] are now much more conscious of the value of money,'' she says.

Buying nothing won't suit everyone - and money needs to keep moving around the economy, Guerin-Goodall says - but those wanting to try something less severe have Buy Nothing New Month in October.

The taxman cometh but app saves the day

A big tax bill was the final straw for Kimberly Palmer along with the warning from her husband - an accountant by training - she was becoming ''financially unhygienic''.

''I've been scared into being more financially responsible, finally,''Palmer, 40, says.

She set up a payment plan with the Tax Office to clear her $16,000 tax liability. She also transferred her credit-card debt to a low-rate card, which she then didn't use for any further spending.

An iPhone and iPad app, My Weekly Budget, helped her monitor her spending so she could see where she was going wrong.

Next she set up an online bank account to squirrel away anything left over after she'd made her monthly transfer to the ATO and cleared her card.

She could have directed the money into the offset account attached to the mortgage, but ''I needed to see for myself the money growing,'' she says.

''It was kind of exciting. And in a transaction account it's hard to remember what's savings and what's there to be spent.''

Now her debts are gone, she's sending money to the mortgage-offset account and salary-sacrificing $400 a month into superannuation.

''It only costs me about $200 because it's taken out of pre-tax income. I was amazed - it's like free money,'' she says.